Franklin Wireless Corp (FKWL) Q1 2025 Earnings Report

Franklin Wireless Corp (FKWL) reported QQ1 2025 revenue of $13.3229 million, marking a year-over-year increase of 37.98% and a remarkable sequential gain of 117.81% from the prior quarter. Gross profit totaled $2.0715 million with a gross margin of 15.55%, while operating income remained negative at $0.3728 million. The company benefited from non-operating income of $1.0693 million, lifting income before tax to $0.6965 million and producing net income of $0.5152 million ($0.0437 per basic share; $0.0436 per diluted share). EBITDA was negative at $0.3728 million, signaling that core operating profitability remains a near-term hurdle, even as the company shows meaningful top-line growth. On the balance sheet and cash flow, Franklin Wireless demonstrated a robust liquidity profile: cash and cash equivalents of $14.618 million and short-term investments of $26.061 million (total cash and short-term investments at $40.678 million), without meaningful long-term debt (~$1.289 million). Net debt stood at approximately negative $12.98 million, underscoring substantial net cash. Operating cash flow reached $2.6709 million, with free cash flow of $2.6494 million, highlighting strong cash generation relative to the revenue base. The QQ1 2025 results reaffirm the company’s positioning in the IoT/M2M and 5G-enabled connectivity space, supported by a solid liquidity cushion that can fund R&D and strategic initiatives. Key takeaways for investors: (1) Revenue growth momentum is evident and outpaced peers in QQ1 2025, (2) The bottom-line is helped by a sizable non-operating income line, but the business needs to convert this into sustained operating profitability, (3) Balance sheet strength and strong cash generation provide optionality for future investments or capital returns, (4) Valuation signals are nuanced given the enterprise value metrics and the small-cap profile. Ongoing monitoring should focus on margin expansion, operating leverage, product mix shifts (hardware vs. software/services), and cadence of new customer wins in IoT/M2M applications.